---
title: How are Sydecar Fees treated for tax?
description: How are Sydecar Fees treated for tax?
---

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# How are Sydecar Fees treated for tax?

Sydecar’s administrative fee is considered a Syndication Cost, which must be capitalized as an asset rather than reported as an expense; therefore, this fee is not deductible.

- Sec. 709 and the associated regulations deny deductions for partnership organizational expenses and syndication costs. Examples of potential ***syndication costs include brokerage fees, registration fees, and legal and accounting fees incurred in connection with issuing and marketing of interests in a partnership.***
- A partnership may elect to amortize its organizational expenses under Sec. 709(b), but ***no such election is available for syndication costs, which must be capitalized.***
- Rev. Rul. 81-153 the IRS ruled that an investor could not deduct syndication costs that it paid in connection with its acquisition of a partnership interest. In that ruling, a partnership (or its promoter) agreed to make payments to various investment and tax advisers in order to obtain their assistance in selling the partnership's interests to their clients.

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